US jobs data collected during omicron’s peak still showed amazing growth

Making a comeback.
Making a comeback.
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The US added hundreds of thousands more jobs in January than economists expected, with Labor Department data showing a labor market recovery that didn’t flinch at the sight of omicron.

The 467,000 new jobs, led by the ongoing rebound in the leisure and hospitality sector, was much larger than the 125,000 jobs economists broadly expected. (Some even feared a decrease because the data were collected in the first two weeks of the month during omicron’s peak.)

Meanwhile, the readings for November and December were revised upwards by more than 700,000 jobs, showing that the recovery leading up to the omicron wave also was stronger than what economists initially thought.

More job seekers pushed up the unemployment rate in a good way

The US added 1.4 million workers to the labor force in January compared to December. These are people who came off the sidelines and started looking for jobs again. As a result, for the first time since September 2020, the short-term unemployed are now a larger share of the US’s unemployed population overall than the long-term unemployed.

This also means that the unemployment rate increased from 3.9% in December to 4% in January but only because the labor force increased. The unemployment rate for Black Americans, however, is still near 7%, which is far from the ideal 3.5% that economists look for when defining maximum employment. 

The bad news in the January US jobs report

The flip side of this good news is that there were 3.6 million workers out during the month due to sickness—more than at any other time in recorded history.

The shortened quarantine time that the US Centers for Disease Control and Prevention (CDC) implemented just prior to January may have played a role in keeping these workers on payrolls, but many suffered through these periods without paid sick leave, meaning January’s omicron wave could weigh down the gross domestic product (GDP) report.

The data also do not show that daily deaths from covid-19 in the US have now reached 2,600 on average.